News Corp profit beats expectations; newspaper ad sales still weak
(Reuters) - News Corp (NWSA.O) reported better-than-expected quarterly profit on Thursday as a result of keeping costs in control even though its newspapers still suffered from declines in advertising revenue and subscriptions sales.
For the quarter ending March, adjusted earnings per share was 11 cents, handily beating analysts' forecasts of 3 cents.
News Corp, which is controlled by Rupert Murdoch, is the publisher of several newspapers including The Wall Street Journal and The Australian, the owner of book publisher HarperCollins, Australian pay-TV and digital real estate stakes and education company Amplify.
The company also on Thursday named William Lewis, who had been filling the job on an interim basis, as chief executive officer of Dow Jones.
Newspapers make up the bulk of the company's business, and News Corp is not immune to the challenges besetting an industry hit by plunges in print advertising.
Revenue at its news and information division, which represents more than 70 percent of its overall revenue, fell 9 percent on declines in ad and subscription sales.
The company said that revenue at its Australian newspapers - the largest newspaper group at News Corp - dropped 21 percent partially related to foreign currency fluctuations.
Stripping out divestitures and currency changes, News Corp said that total revenue was flat at $2.08 billion. Analysts polled by Thomson Reuters were expecting $2.06 billion.
"It's better than anticipated despite continued ad pressure in Australia and building out Amplify and issues at Dow Jones. They are still holding their own," said Doug Arthur, an analyst with Evercore Research.
News Corp shares were not affected in after-hours trading after closing flat at $17.11 on Thursday.
News Corp made its biggest acquisition to date since it separated from its cable, TV and movie studio sister properties now known as 21st Century Fox Inc last year. Last week it agreed to pay $415 million for romance novel publisher Harlequin Enterprises Ltd with plans to use the company's global distribution to help its publishing house HaperCollins sell more books across the globe.
Net income fell to $48 million, or 8 cents per share, from $323 million, or 56 cents per share, in the same period last year which included a non-taxable gain on the Sky Network transaction.
(Reporting by Jennifer Saba in New York; Editing by Cynthia Osterman)
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